Executive Summary Economic red flags are waving across the globe, meaning the challenges are not limited to the United States. The European Union’s 27 member states just recoded 8.1% year over year inflation. The E.U.’s partial ban on Russian oil because of the Russian war with Ukraine [...]
Executive Summary The Dow just finished its eighth consecutive down week, which has not happened since 1923. The Fed is sticking with their plan to fight inflation – even if the stock market suffers. Oil and gas are leading inflation with the record high national average gas [...]
Executive Summary Most people have noticed home prices have exploded due to extremely low mortgage rates post COVID along with low inventory levels. Inflation and mortgage rates have risen sharply; however, government stimulus has ended. Wages have not kept pace which means housing is very unaffordable (see [...]
Executive Summary Economist John Hussman recently stated speculative bubbles teach investors “dangerously incorrect lessons” that “stocks always recover.” Stock market indices have turned negative this year, and the dispersion of returns within are disturbing (second graph). The Buffet Indicator (third graph) shows much more room to fall [...]
Executive Summary By now many have heard first quarter real GDP turned negative by 1.4%. In the second graph one can see net exports had the largest negative impact on GDP. Personal expenditures held steady, however may not do so in the second quarter as real disposable [...]
Executive Summary The first graph below is Warren Buffet’s favorite market valuation ratio. Note from current valuations, the S&P 500 would need to fall by 64% to reach the long-term average. While many may think it is not possible, in the last 20 years markets have twice [...]
Executive Summary The Fed’s monetary policy for the last ten years has been characterized as “too loose for too long,” resulting in overvalued equity markets and inflation. Looking at the two graphs below, one can see the overvaluation as shown by various metrics. Statistically, the overvaluation is [...]
Executive Summary The Federal Reserve Bank’s policies including increasing the monetary base and funding the Federal Government’s stimulus programs led to a surge in growth and inflation. (See right side first graph) However, now the Fed is reversing policy stances by raising interest rates and halting QE. [...]
Executive Summary In March of this year the Fed began increasing short-term interest rates. Typically, they do not start rate tightening when consumer sentiment is plummeting (see first graph). At the same time, the Fed usually does not also hold rates so low when inflation is so high [...]
Executive Summary In a healthy economy, long-term interest rates are higher than short-term rates (see first graph). However, when short-term rates are higher than long-term rates (inverted yield curve), it has typically been a precursor to a recession (see third graph). Most people have recognized steep inflation [...]